EXHIBIT 10.3
AMENDMENT TO EMPLOYMENT AGREEMENT
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This Amendment to Employment Agreement is entered into on November 23,
1999, by and between UNILAB CORPORATION, a Delaware corporation ("Unilab") and
XXXXX X. XXXXXX ("Xxxxxx") with reference to the following:
A. On January 20, 1997, Unilab and Xxxxxx entered into an employment
agreement (the "Employment Agreement") defining the terms of Xxxxxx'x employment
by Unilab.
X. Xxxxxx and Unilab desire to amend certain provisions of the
Employment Agreement.
NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT OF
WHICH IS HEREBY ACKNOWLEDGED, the parties agree as follows:
1. Section 7 of the Employment Agreement is amended to read as
follows:
"7. SEVERANCE PAYMENT
(a) If Executive's employment is terminated by The Company without
Cause and not associated with a Change of Control, the Executive will
receive (i) 18 months of compensation as defined in Sections 3(a), (b) and
(d) payable on the same basis and in the same manner as base salary was
paid prior to termination and (ii) continued participation for 18 months
following the date of such termination in The Company's life, accident,
disability and health insurance programs on the same terms and conditions
as in effect on the date of termination, or if continued participation in
The Company's programs is not available, participation in comparable,
alternate programs.
(b) If Executive's employment is terminated by The Company without
Cause in association with a Change in Control then, notwithstanding anything to
the contrary herein, (i) such termination of employment shall not constitute a
breach of this Agreement, (ii) on the effective date of such termination of
employment, Executive shall be paid in cash (A) the $400,000 bonus previously
authorized by the Board of Directors of the Company, (B) his vested $166,711.10
benefit pursuant to the Unilab Corporation Deferred Compensation Arrangement,
and (C) $2,128,000 in cancellation of the portion of his vested stock options
which Executive has not agreed to roll over into UC Acquisition, (iii) Executive
shall not have any rights to any severance or other payments or benefits under
this Agreement, and (iv) his vested benefit pursuant to the Unilab Corporation
Executive Retirement Plan shall be paid in accordance with its terms and the
Company agrees that such termination shall be termination for "Good Reason"
under the plan."
Existing sections 7(d) and 7(e) shall remain and become sections 7(c)
and 7(d) respectively.
2. Section 8 of the Employment Agreement is deleted in its entirety.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement on November 23, 1999.
UNILAB CORPORATION, a Delaware
corporation
By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx, Executive Vice
President, Secretary, and General
Counsel
/s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX
AGREEMENT
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This Agreement is entered into by and between UNILAB CORPORATION, a
Delaware corporation ("Unilab") and XXXXX X. XXXXXX ("Xxxxxx") with respect to
the following:
X. Xxxxxx is the President, Chief Executive Officer, and Chairman of
the Board of Directors of Unilab.
B. On January 20, 1997, Xxxxxx and Unilab entered into an employment
agreement which sets forth the terms under which Xxxxxx is employed by Unilab.
C. On May 25, 1999, Unilab agreed to merge with UC Acquisition in a
leveraged recapitalization transaction (the "Recapitalization") in which Unilab
survives and the business of Unilab continues.
X. Xxxxxx and UC Acquisition have agreed that effective upon the
closing of the Recapitalization, Xxxxxx will cease to be employed by Unilab as
its President and Chief Executive Officer.
E. Unilab wants to ensure that Xxxxxx will not (a) enter into an
employment or other similar arrangement during the two-year period following
the closing of the Recapitalization that would result in Xxxxxx competing with
Unilab under certain circumstances, and (b) solicit customers and employees of
Unilab during the five-year period following the closing of the
Recapitalization, and Xxxxxx is willing to enter into such a non-compete and
non-solicitation agreement, all as described in this Agreement and the Non
Compete and Non Solicitation Agreement.
NOW THEREFORE, the parties to this Agreement agree as follows:
1. Amendment to Employment Agreement. Contemporaneously with the
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execution of this Agreement, and in consideration of the Non Compete Agreement,
Xxxxxx and Unilab will execute an amendment to Xxxxxx'x Employment Agreement by
which Section 7 will be amended to delete subsection 7(c) in its entirety, to
delete Section 8 in its entirety, and to amend subsection 7(b) to read in its
entirety as follows:
"(b) If Executive's employment is terminated by The Company without
Cause in association with a Change in Control then, notwithstanding
anything to the contrary herein, (i) such termination of employment shall
not constitute
a breach of this Agreement, (ii) on the effective date of such termination
of employment, Executive shall be paid in cash (A) the $400,000 bonus
previously authorized by the Board of Directors of the Company, (B) his
vested $166,711.10 benefit pursuant to the Unilab Corporation Deferred
Compensation Arrangement, and (C) $2,128,125 in cancellation of the portion
of his vested stock options which Executive has not agreed to roll over
into UC Acquisition, (iii) Executive shall not have any rights to any
severance or other payments or benefits under this Agreement, and (iv) his
vested benefit pursuant to the Unilab Corporation Executive Retirement Plan
shall be paid in accordance with its terms and the Company agrees that such
termination shall be a termination for "Good Reason" under the plan."
Existing sections 7(d) and 7(e) shall remain and became sections 7(c) and
7(d) respectively.
2. Non Compete and Non Solicitation Agreement. Contemporaneously
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with the execution of this Agreement, and in consideration of the Amendment to
the Employment Agreement, Xxxxxx and Unilab will execute a Non Compete and Non
Solicitation Agreement under which Xxxxxx will (a) agree not to compete with
Unilab for the two-year period immediately following the closing of the
Recapitalization, and (b) not to solicit customers and employees of Unilab for
the five-year period immediately following the closing of the Recapitalization,
both in exchange for Unilab's payment at the closing of Two Million Five Hundred
Thousand Dollars ($2,500,000).
3. Effective Date. The Amendment to Employment Agreement described
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in Paragraph 1 and the Non Compete and Non Solicitation Agreement described in
Paragraph 2 shall each be effective upon the execution of this Agreement, the
Amendment to Employment Agreement, and the Non Compete and Non Solicitation
Agreement.
4. Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the State of Delaware.
5. Entire Agreement. This Agreement and the Amendment to Employment
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Agreement and Non Compete and Non Solicitation Agreement described in Paragraphs
1 and 2 constitute the entire understanding between the parties with respect to
the subject matter hereof, superseding all negotiations, prior discussions, and
preliminary agreements not specifically included in the terms and conditions of
this Agreement and the Amendment to Employment Agreement and Non Compete and Non
Solicitation Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on November 23, 1999.
UNILAB CORPORATION, a Delaware
corporation
By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
Executive Vice President,
Secretary, and General Counsel
/s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX
